UPDATE—May 30, 2024: This article has been updated to reflect more recent analyst estimates and share price information.
Key Takeaways
- Costco Wholesale reports fiscal third-quarter earnings after the bell on Thursday.
- Analysts expect Costco to report growing revenue and net income from the year-ago period, along with an uptick in memberships.
- Uber recently announced that Uber Eats users can order Costco products through the app, whether they are Costco members or not.
- This earnings report will be Costco's first in decades with a new finance chief, as longtime CFO Richard Galanti stepped down in March.
Costco Wholesale (COST) reports fiscal third-quarter earnings after the closing bell on Thursday, in what will be the warehouse retailer's first report in decades with a new chief financial officer (CFO) after longtime CFO Richard Galanti stepped down from the position in March.
Analysts expect Costco to report a nearly 8% year-over-year rise in revenue to $57.92 billion, up from $53.65 billion in the third quarter of last year, according to analyst estimates compiled by Visible Alpha. Net income is expected to jump 25% to $1.63 billion from $1.3 billion.
Costco's second-quarter results sent shares tumbling nearly 10% over a two-day stretch in early March as sales grew less than analysts expected, but shares have recovered in the months since, rising to record levels over the last week.
| Analyst Estimates for Q3 2024 | Q2 2024 | Q3 2023 | |
| Revenue | $57.92 billion | $58.44 billion | $53.65 billion |
| Diluted EPS | $3.68 | $3.92 | $2.93 |
| Net Income | $1.63 billion | $1.74 billion | $1.3 billion |
Key Metric: Memberships
Costco, like other warehouse retailers including BJ's Wholesale Club (BJ) and Walmart's (WMT) Sam's Club, uses memberships to provide access to its stores, which helps Costco generate revenue before a shopper sets foot in the store. Since 2017, Costco memberships, which come in two price tiers, have cost $60 per year for the "Gold Star" and business memberships, and $120 per year for the executive membership.
However, company leadership has said several times in recent quarters that Costco has passed the average amount of time it usually takes between membership price hikes, and suggested it's a matter of "when, not if" membership prices go up. Investors will likely be watching closely whether Costco provides more details on its plans for membership pricing when the company reports earnings.
Analysts expect memberships to have climbed slightly in the quarter to 73.55 million, up from 73.4 million last quarter, and 69.1 million a year ago.
Business Spotlight: Uber Eats Partnership, First Report With New CFO
In the weeks ahead of Costco's earnings announcement, its market potentially grew thanks to a new partnership with Uber Technologies (UBER) that the ridesharing company announced in its annual event May 15.
Costco has experimented with delivery through Uber Eats in test areas like Texas, and has an existing partnership with Instacart that allows members to order products for same-day delivery.
Through the new partnership, Uber Eats users will be able to order Costco products through the app, whether they are Costco members or not, a significant step for Costco as it is protective of its members-only shopping experience, cracking down on membership sharing over the last year.
However, Uber said Costco members will receive special discounts, and can also get 20% off a year-long Uber One membership, Uber's subscription service that offers discounts on rides and free delivery on Uber Eats orders. Uber said during its event that the service would be available in multiple markets across the U.S. and several other countries where Costco operates, with plans to expand further.
Thursday's release will also be Costco's first earnings report under its new CFO, after former Kroger (KR) CFO Gary Millerchip took over the position last month. Galanti, who had served in the role for nearly 40 years, is remaining with Costco in an advisory capacity through January 2025.
Costco shares have gained over 23% so far this year, at $814.69 as of 11 a.m. ET Thursday ahead of the company's earnings report.
Article Sources
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Costco Wholesale. "Costco Wholesale Corporation Announces Richard Galanti Will Step Down as CFO, Names Gary Millerchip New CFO."
Costco Wholesale. "Q3 2024 Earnings Call."
Costco Wholesale. "Costco Wholesale Corporation Reports Third-Quarter and Year-to-Date Operating Results for Fiscal 2023."
Costco. “Join Costco.”
Costco Wholesale. "What Is an Executive Membership?"
Costco Wholesale. "Company Profile."
Costco Wholesale. "What is CostcoGrocery?"
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